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SunEdison/Vivint Solar Deal Up in Smoke, Shares Choke

The value of SunEdison's (SUNE - Get Report) offer for Vivint Solar (VSLR) continues to lag well below the $16.50 per share announced when the deal was unveiled July 20, prompting speculation among arb investors that the transaction will fall apart.

SunEdison proposed a combination valued at $9.89 per share in cash, $3.31 per share in SunEdison stock and $3.30 per share in SunEdison convertible notes. But a harsh reaction to the deal, due to growing wariness about prospects for Vivint's business (residential solar panels) prompted an immediate drop in SunEdison's stock. Its share plunged from $31.66 on July 17, near the shares' high this year, to just under $14 on Aug. 11. And Sun Edison's shares have continued to drop. Through mid-afternoon trading Monday, they stood at $8.88.

The deal, which was originally predicted to close in the fourth quarter of 2015, would make SunEdison the largest residential and commercial solar provider in the world.

Vivint Solar, which went public with an IPO last year, is controlled...